Jay’s Parcel Notes: May 25-June 7

I’m Jay Kent, managing director of SLB Performance, a consulting firm that helps companies reduce supply chain costs, implement BI tools, and improve in-stocks and customer service.  After 25 years of leading some of the most complex supply chains in the industry, I began advising companies in multiple industries and verticals. To mitigate costs and improve efficiencies, it’s important to understand the market. So twice a month, I’ll share parcel news and thoughts. Be sure to hit the subscribe button to receive the latest newsletter in your LinkedIn notifications.

Random tidbits in today’s notes, starting with a good article from DC Velocity on the parcel market summer outlook – “As the parcel express market heads into summer, a perfect storm of carrier challenges, market shifts, an unsettled economy, and weakening demand is threatening to upend the best-laid plans of shippers—just as supply chains are beginning to normalize after two years of pandemic-induced turmoil.” 

Indeed, UPS’ Teamsters contract expires on July 31, FedEx will announce their fiscal Q4 (period ending May 31) on June 20, and Amazon, still in a reduction mode, will it step up to become a national 3rd party delivery provider?

Photo credit: Depositphotos.com

FedEx

• FedEx reached a tentative agreement with pilots of its air delivery unit who had voted in favor of a strike earlier this month seeking higher pay. Details of the agreement are not public yet, but it likely includes an agreement to increase pilot pay, something the pilots were pushing hard on.
• FedEx launched its Sustainability Insights for Customer Emissions Tracking platform, which uses near-real-time FedEx network data to estimate CO2e emissions for both individual tracking numbers and FedEx.com accounts. Users can view historical emissions data by account as well as search by tracking number with their free FedEx.com login. Data is displayed in a variety of metrics, such as mode of transport, service type, and country or territory for all eligible FedEx Express, FedEx Ground, and FedEx Freight shipments. Keep an eye on this – A growing number of shippers are looking for standardized platforms to measure sustainability KPIs. While a good move by FedEx, what’s needed is a standard method to measure across all modes and all carriers.

UPS

• UPS union workers will vote this week on whether to authorize a strike if the Teamsters do not reach a new contract with UPS by August 1st. The vote results will be announced next week on June 16, the union said. Note that strike authorization votes are routine during contract negotiations and almost always pass. 
• UPS and the Teamsters apparently reached a tentative agreement to reduce the amount of SurePost packages eligible for delivery by the USPS, according to the union. If true, this will be a big hit against the USPS, which lost volumes when FedEx moved its SmartPost volumes in-house, and from Amazon, which is taking more of its volumes in-house as well.
• In late April, UPS revealed a plan to all but eliminate package sorting work during the day shift on Fridays at Worldport, perhaps the first time the company has cut a shift since establishing the air hub in 1988. The cut officially began this month, and workers that have typically worked Monday-Friday are now moving to a Sunday-Thursday schedule, creating challenges with transportation, child care, and religious practices, according to workers.
• When UPS President of Global Government Affairs Michael Kiely spoke to JAXUSA Partnership members in March, he said the parcel delivery and logistics company’s expansion in Jacksonville came down to workforce and “location, location, location.” “Florida is one of the fastest if not the fastest-growing state in the country. Jacksonville is one of the fastest-growing parts of the state. And that’s where our investment dollars are going to go,” Kiely told the audience at the JAXUSA meeting on March 28. According to Kiely, UPS was able to double the size of its throughput at its Jacksonville facility to 1.2 million packages per day, mainly through automation technology and hiring more Class A drivers to handle the increased volume.

Amazon

• Amazon.com is rolling out artificial intelligence across a dozen of its largest warehouses to screen items for damage before orders are shipped to customers. it expects the technology to cut the number of damaged items sent out, speed up picking and packing, and eventually play a critical role in the company’s efforts to automate more of its fulfillment operations. 

Heading to #homedeliveryworld next week? Let me know, I’m heading up the parcel track and will be involved in a couple of sessions. Click here for more info on the conference.

That’s it for now. Comments are always welcome. Let me know what I missed. Stay tuned for the next newsletter on June 21, and don’t forget to hit the subscribe button to ensure you receive it in your LinkedIn notices.

– Jay